If a major solar project loses its government grant because its owners didn’t meet the grant’s milestones, most people would expect a proposed coal-fired power station in the same situation to be treated the same way, right?
Not with Energy Minister Martin Ferguson in charge.
On 7 February Ferguson announced that the Moree Solar Farm — one of the Solar Flagships program’s shortlisted projects — was to lose its $306.5 million Commonwealth grant. After eight months, the project had failed to secure a power purchase agreement for its proposed 150 Megawatt solar power station.
Although this was disappointing news, many environmentalists became hopeful there would now be no way out for HRL, a company that failed to meet the conditions of its $100 million Commonwealth grant for a coal-fired power station by the 31 December 2011 deadline set by the Gillard Government.
The Energy Department was expected to make a decision on how to treat HRL’s grant and several weeks ago I discussed why the grant should be withdrawn in New Matilda.
However on 10 February Minister Ferguson and his Victorian Government counterpart Michael O’Brien announced that HRL would be given another six months to satisfy their grant preconditions.
HRL is not trying to build a solar farm. Its proposal is for a new 600 Megawatt brown coal power station at Morwell in Victoria’s Latrobe Valley, using a technology that reduces the plant’s carbon pollution intensity to that of a standard black coal power station. If that sort of modification and meagre carbon pollution reduction sounds a little "yesterday", that’s because it is.
It is now five years since HRL was awarded its grant by the Howard government, over seven times as long as the Moree solar project got to meet its grant preconditions. Over that period HRL have stumbled their way through their list of milestones requiring — as the Energy Department revealed in Senate Estimates last year — at least three extensions directly from the Minister.
Ferguson’s decision to extend HRL’s deadline in the same week as giving solar the chop was more than plain hypocrisy. It clarifies his loyalties and interests, which clearly do not align with those of the community. Last year polling showed that 67 per cent of Victorians would support HRL’s grant being removed and given to renewable energy instead.
But it is the Gillard Government who should be most concerned about Ferguson’s special treatment for HRL. After the political pain endured as it brought in a carbon price, the last thing they need now is the clean energy future commencing with a new dirty coal-fired power station. In fact, when Gillard said "there will be no more dirty coal-fired power stations built in this country", she effectively laid down the key test of a carbon price.
Fortunately, the fact that HRL still are unable to meet their grant milestones is down to the community standing up to Martin Ferguson’s dirty energy agenda. The reason HRL have failed to secure finance for their project is that no investor in their right mind has been prepared to touch HRL’s project. With the big four domestic banks and a host of major international banks all declaring themselves out of HRL’s project, finding a financial backer is looking increasingly difficult.
Community opposition to HRL has also kept them from securing their legal approvals. When the EPA gave HRL works approval for the first half of their project, it contradicted nearly 4000 Victorians who lodged their opposition. The approval was also immediately taken to court by Victorian environmental groups, where it remains today.
The community will be working hard over the next six months to make sure HRL’s dirty project never goes ahead. In large part our success will rest on one critical question: how far will this government let Martin Ferguson go to destroy its climate change credentials?
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